What Is the Difference between a Limit Order and a Market Order in the Context of the Bid-Offer Spread? ▴ Learn

What Is the Difference between a Limit Order and a Market Order in the Context of the Bid-Offer Spread?

A market order is executed immediately at the best available price, meaning a buyer will pay the current offer price and a seller will receive the current bid price, crossing the spread. A limit order specifies a maximum buy price (or minimum sell price) and is placed within the spread, or at the bid/offer.

It may not execute immediately but avoids paying the full spread cost.

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